When we often talk about the salary cap one of the topics that always comes up is dead money. Dead money is the amount of cap space that you will still devote to the salary cap even if the player is no longer on the team. In an ideal world you would be able to run a roster with low amounts of dead money, but that isn’t the easiest thing to do, but what is a reasonable threshold of dead money for a team to carry on the cap?
To try to help answer that question I wanted to look at all of our past cap data dating back to 2013 and see how playoff teams fared with dead money. To take into account salary cap inflation I converted dead money into percentages of the salary cap for a given year and used those numbers to bin the teams into different dead money groups.
Not surprisingly the teams that effectively punt on the season with huge amounts of dead money the odds of making the playoffs is pretty low. None of the 13 teams with over 21% of the cap tied to dead money have made the playoffs and if you drop down to 16% just 7 of 37 teams have made the playoffs. This is no real surprise since we often correlate dead money with a bad roster and these teams are at a big competitive disadvantage because they have to perform salary cap gymnastics to function for a year.
What I found more interesting though is that the low levels of dead money really didn’t make any appreciable difference in the ultimate outcome. The overall hit rates for teams whether they had no dead money or closer to the 12% mark were basically the same. While teams with low amounts of dead money in theory should give you an advantage it really did not.
I think this is in part because the willingness to take on no dead money isn’t necessarily a sign of a great roster but sometimes simply a strategy by teams to lessen risk. For example the Buccaneers are almost always at the bottom of the dead money lists every year, yet they are one of only three teams since 2013 to not make the playoffs (the Jets and Browns are the other two). But to get ahead in the NFL usually is going to take some risky moves and that means using the cap accounting rules to try to get a competitive advantage. Having some dead money should show that a team is trying to manipulate numbers to get an extra player or two in a given year. While it may or may not have worked out that is maximizing the roster more than just trying to avoid dead money by never prorating money or never cutting players like say the Bengals.
In digging deeper into the numbers if there is a “sweet spot” for dead money it looks to be between 8.5 and 10% where around 55% of the teams made the playoffs. Now that doesn’t mean that this is some magic number to strive for. I think it’s just the group that is closest to the league average of 11.3% without going over which means they are doing slightly better with their cap management and decisions while also utilizing the rules to maximize their roster.
Should We Gut the Roster?
One of the more recent phenomenon’s in the NFL is the “roster” purge. This started with the Raiders in the early 2010’s when they finally stopped the cycle of cap misery and just tore it apart. Since that time more and more teams have taken some reset years, with the Dolphins last year being the most recent to really do things. Does it work though? Here are the list of teams that had at least 17% of the unadjusted salary cap tied into dead money.
|Team||Year||Dead Money (% of Cap)||Playoffs (n+1)||Playoffs (n+2)||Playoffs (n+3)|
|% of Eligible Teams||19.0%||25.0%||35.7%|
Clearly this is not a miracle cure for a bad roster. A miracle cure for an overpaid roster maybe, but the purge itself isn’t exactly leading to playoff runs at any great clip and it certainly hasn’t led to sustained success either. Of these teams only the Falcons and Saints have made the playoffs multiple times in the three years following the purge (the Saints did it twice, one time after purge 1 and 3 times in a row following purge 2). It is also notable that many of these teams are on here multiple times. So it is a tough position to be in as you are basically punting on the year you purge the team and then have about a 25% chance to make it one time in the next three years.
The one lesson in this may come from the Bills and more so the Dolphins however who were the first teams to do a purge that really brought in assets while doing it. That is different than most of the teams who were just gutting the roster. I think overall its fine to blow things up but don’t just blow things up for the sake of blowing it up which was the 2013 Jets and at least one of the many Browns teams on this list.
How Do Things Look for 2020
Right now the Panthers, Jaguars and Rams are the only teams to be in that danger tier. Carolina is already at 20.8% and would be the first team with a number that high to make the playoffs if they made it. The Jaguars and Rams are in the 18-19% range though both teams are in a position to hit the 20% threshold. Dead money is at a league low right now but that can change once we cut down rosters, but if it remains on the low end that may mean that the gap between an average NFL team and these three is potentially bigger.
Of the teams over 17% last season we have the Dolphins (35.4%), Giants (29.4%), Cardinals (26.5%), Jaguars (19.7%), and Steelers (17.9%). History will tell you that one of those teams will likely make the playoffs. Which one is anyone’s guess
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.